SDBA eNews: June 26, 2014

In This Issue

Registration Open for SDBA's 2014 IRA School

The SDBA is offering its 2014 IRA School Sept. 3-5 at the Clubhouse Hotel & Suites in Sioux Falls.

IRAs still have unlimited potential. Fewer people are qualifying for pensions, and more than 50 percent of all employees work for an employer that doesn’t offer any type of retirement plan. IRAs are the alternative, so let’s work together to see how we can increase your IRAs.

CFPB, Fed Offer TILA-RESPA Integration Webinar Recording

The Consumer Financial Protection Bureau and the Federal Reserve have made available a recording of a June 17 webinar answering basic compliance questions about the TILA-RESPA integrated mortgage loan disclosures.

The webinar was the first in a series that will help financial institutions implement the new forms, known as the Loan Estimate and the Closing Disclosure.

SDBA Taxation Equality Awareness Campaign


Learn more and get involved.

Upcoming Events

View all SDBA events

Sponsorship Opportunity

Learn more about sponsoring the SDBA eNews.


Contact Alisa DeMers, SDBA, at 800. 726.7322 or via email.

SDBA Taxation Equality Awareness Campaign Sample Ads Available

A sample newspaper ad and 60-second radio ad for the SDBA's Taxation Equality Awareness Campaign are now available via the SDBA's website. The goal is to help convince Congress to remove outdated and costly tax exemptions that credit unions and Farm Service offices have enjoyed for generations.

The ads were created and utilized by banks in the Brookings area in May 2014. The SDBA encourages banks to modify and use the ads in their local communities. The ads are branded as being sponsored jointly by the SDBA and local community banks.

"The SDBA will continue to carry the message of need for a current-day congressional review of these old exemptions in the face of mounting evidence that tax code change should be a natural byproduct of mission change," said SDBA President Curt Everson. "I hope that all of South Dakota’s banking leaders will carry that same message— within your bank, within your community and finally to our members of Congress."

For questions or assistance with the ads, email Alisa DeMers with the SDBA or call 605.224.1653.

ABA Testifies on Ag Credit Availability

The banking industry is well-positioned to serve America’s agricultural credit needs, ABA Agricultural Credit Task Force Vice Chairman Leonard Wolfe told a congressional agriculture subcommittee yesterday -- which reduces the need for the taxpayer-backed Farm Credit System.

More than 80 percent of banks have farm loans on their books and banks with an agricultural specialty increased their farm lending 9.1 percent in 2013, said Wolfe, who is also chairman, president and CEO of United Bank and Trust, Marysville, Kan. Moreover, he added, the repeal of borrower term limits for USDA Guaranteed Farm Loans will further increase banks’ ability to meet farmers’ credit needs.

This reduces any need for the Farm Credit System, which was chartered nearly a century ago when farmers had no other source of long-term real estate credit. “The conditions that led to the creation of the Farm Credit System nearly 100 years ago no longer exist, and yet we continue to have a government-assisted, tax-advantaged farm lender providing credit to customers who would be able to easily borrow from taxpaying institutions like mine,” Wolfe said, noting that the FCS is today shrinking the share of new loans going to young, beginning and small farmers, despite its taxpayer backing.

A Farm Credit System witness also testified at the hearing, and committee members questioned her aggressively. They specifically asked about the FCS's "mission creep," its extraordinary loan last year to Verizon and the appropriateness of a tax-advantaged GSE competing directly with banks. Read the testimony.

SBS Launches New Certification Program

Secure Banking Solutions (SBS), an SDBA endorsed vendor, has announced the opening of its SBS Institute.

The SBS Institute will offer certifications in a variety of technology related fields for bankers across the nation. These certifications will help bring best practices in security to the community banking industry and allow banks to prepare and pass their state and federal examinations.

The SBS Institute serves community banks by providing educational programs that will verify a banker has the knowledge and skills to protect against today’s information security threats. The certification programs offered by the institute are uniquely designed to address community banking needs following today’s community banking problems and solutions.

The instructors will guide the students through the course, which can be delivered online or onsite. The online course is a 10-week option which allows the student to fit the course into their schedule. The student is able to watch lectures and complete any and all work at their convenience. An onsite option is also available. Learn more.

OCC Sees Risk in Sluggish Economy, Interest Rates, Cyber Attacks

Generating acceptable returns, the interest rate environment, and increasing cyber attacks remain among the top risk challenges for banks, according to the Office of the Comptroller of the Currency’s new Semiannual Risk Perspective report released yesterday.

While the OCC noted that financial performance, asset quality and profitability continued to improve across the industry in the second half of 2013 -- including a new record for net income among federally chartered banks -- its report focused on a long list of potential risks.

The OCC cautioned that with loan and noninterest income growth lagging, banks must be careful when identifying new products to consider the necessary expertise, systems and risk controls.

The report also noted that a rise in long-term interest rates in 2013 could challenge banks that have reached for yield in a low-rate environment. “Banks with significant concentrations in longer-term assets should assess their vulnerability to a sudden rise in interest rates,” the OCC said. Read the report.

FHFA Considers Suing Servicers, Insurers over Lender-Placed Insurance

The Federal Housing Finance Agency will consider litigation over lender-placed insurance purchased for foreclosed mortgages owned or guaranteed by Fannie Mae and Freddie Mac. The agency is following a recommendation yesterday by its inspector general, which argued that the housing GSEs should seek to recover past LPI charges it called excessive.

According to the inspector general, LPI rates in several jurisdictions were too high due to various kinds of commission structures and profit-sharing arrangements between insurers and servicers. The inspector general estimated that in 2012 Fannie and Freddie were charged $158 million in excessive LPI premiums.

ABA and its American Bankers Insurance Association subsidiary are following the issue closely and will engage in further discussions with FHFA. Read the report. For more information, contact ABA’s Kevin McKechnie.

ABA, AARP to Join to Fight Elder Financial Abuse

ABA and AARP on Tuesday announced their intention to work together to protect older Americans’ financial security through a joint commitment to the Clinton Global Initiative.

During the two-year commitment, the two organizations will conduct research on fraud, financial caregiving and senior-friendly banking, create resources for bankers to discuss the prevention of fraud against older Americans, help banks make branches more senior-friendly and help bankers educate older Americans and their caregivers about ways to protect their assets during retirement.

“America’s aging population will transform the way banks provide financial services to their customers,” said ABA President and CEO Frank Keating. “Our planned alliance with AARP will help us provide bankers, older Americans, and their caregivers, with the tools they need to thwart financial crimes.”

The first year of ABA and AARP’s commitment is expected to focus on gathering information, including surveys on existing practices and the development of new materials to help educate bankers and consumers. During the second year, AARP and ABA envision a nationwide campaign with the goal of reaching 1 million older Americans and their financial caregivers. Read more.